January 14, 2017

GOP Health Care Plan: Take from the Poor, Give to the Rich

Without a replacement plan for the Affordable Care Act (ACA), 24 million people who gained health insurance under the law may lose it. Donald Trump (DT) has promised that no one will lose any health insurance, but GOP members of the Congress aren’t backing up his guarantee.

While the Republicans plan to take health care from the poor, they give tax cuts to the rich. The top 1 percent of earners would get an average tax cut of $33,000 if the ACA is repealed, and those in the top 0.1 percent would get an average cut of $197,000. Repealing ACA’s taxes removes the 0.9 percent Medicare payroll surtax on wages above $200,000 ($150 billion) and the 3.8 percent surtax on investment income above the same threshold ($250 billion). That $800 billion increase in the deficit is about half the loss.

Another quarter of the revenue loss comes from repealing various fees on insurance companies, medical device companies, and drug manufacturers. About $450 billion of the $1.10 trillion of costs in repealing the ACA’s Medicare comes from reversing Medicare Advantage cuts. Another $500 billion would come from ending reductions in the growth of provider payments in fee-for-service Medicare. This is just for future cuts. If past cuts are reversed, about $200 billion to $250 billion more would be lost. In addition, Paul Ryan is struggling to pay for his planned $6 trillion tax cut for the wealthy.

Major losers from an ACA repeal are small business owners. With self-employed people, they represent 50 percent out of ACA customers.

While the GOP wants to repeal the ACA within a month, DT said at a news conference Wednesday in New York City that a plan to replace the Affordable Care Act would wait until after Secretary of Health and Human Services nominee Rep. Tom Price of Georgia wins confirmation.

But the chairman of a key committee involved in both repeal-replace and confirming Price said his confirmation may not take place until around the President’s Day recess in February. Sen. Lamar Alexander (R-TN) also doesn’t want to make decisions until he consults with governors who will be in town around Presidents’ Day. Several GOP governors are joining Democrats to oppose the repeal.

As Republicans blithely refer to Obamacare repeal, they probably don’t know how many people are covered by the ACA. The above chart shows the health status of people in the U.S. a year ago. Since then, Medicaid has increased from 71 million to about 74.4 million, largely from Louisiana expanding the program.

Green sections covering 46 percent of the nation are for government employees, including the military.

Red sections are those still uninsured, down to about 27 million people. It includes people ineligible for either Medicaid or the exchange in 19 GOP states and undocumented immigrants. Others earn too much for ACA subsidies or cannot get them because of their employers.

In December House Speaker Paul Ryan (R-WI) said, “We will give everyone access to affordable health-care coverage.” He added that pre-existing conditions are “a very important feature of any health-care system.” DT’s counselor Kellyanne Conway promised that DT will keep the pre-existing conditions. That, of course, was before the GOP senators voted against it along with other health care provisions to help people. Ryan also promised that the GOP will ensure that “no one is worse off.”

“They can say what they want, they can guide you anyway they wanna guide you. In some cases, they guide you incorrectly. In most cases, you realize what’s happened, it’s imploding as we sit.”

He also made the promise that “we’re going to have a health care that is far less expensive and far better.” He didn’t answer the question about whether everyone covered now will continue to have coverage.

In a letter to the Oregonian (January 14, 2017), Terry Weiss of Philomath superbly explained the idiocy of the proposed health care repeal:

“If a little old lady in Oregon can figure this out, why can’t someone in Washington? Medicare, Medicaid, and Obamacare account for thousands of jobs and billions of dollars to healthcare providers and suppliers. If any or all are removed, many thousands of living wage jobs will be lost and millions of dollars in income will vanish. Tax losses will be huge to federal and state budgets. If you can’t wrap your mind around the human aspect—letting people die or go untreated for illnesses and injuries—surely the enormous negative effect on the economy should make you pause.

“Spend billions of dollars dismantling a functional and economical system with only three percent overhead to administer Medicaid and medicare. Then spend more billions putting together another system that is untested and unknown and will take place to put in place. This is efficient government spending?

“I can’t figure out why the first order of business for this Congress and president is to tank the economy and take aay living-wage jobs. The opposite of the promises made by one and all. I known campaign promises tend to be less than truthful, but this is unbelievable. Where are the political commentators, representatives of the medical industrial complex, DEOs, and decent human beings?”

As another “little old lady” in Oregon, I worry about the IQ and common sense of the people who are leading our government. For example, Rep. Bill Huizenga (R-MI) suggested that people shouldn’t go to the doctor immediately with an illness or injury. He proudly cited his own experience by making his son wait a day to go to the emergency room for an arm injury. He saved money, but the arm was broken. According to Huizenga, that’s the reason that people shouldn’t get money for health care. Without necessary insurance, they could just wait until the next day—or perhaps longer.

This level of stupidity is not new. Former House Majority Leader dick Armey (R-TX), leader and instigator of the Tea Party, said, “The largest empirical problem we have in health care today is too many people are too over-insured.” That was when almost 40 million people lacked health insurance.

People who complain about the high cost of insurance refuse to accept the fact that the private market is driving up costs. Medicare, a government program, saw its costs rise by an average of 1.4 percent from 2010 to 2015, less than half the cost increase for private insurers even after the ACA forced them to charge less for “administrative costs.” As the above letter stated, these costs are three percent while the ACA allows private insurers to spend up to 20 percent–and that’s less than in the past.

A year ago Paul Ryan signed legislation to repeal the ACA and cut off federal funding to Planned Parenthood. The bill didn’t succeed, but Ryan and his colleagues had a good time taking away health care for 24 million people. Chip Somodevilla/Getty Images [visual]

Obamacare has been a success: fewer people are uninsured; hospitals’ uncompensated care costs have fallen by over 50 percent; overall national health spending as a share of GDP has dropped faster than predicted; the growth in spending on health needs has slowed to one-third of the average in the early 2000s; the increase in premiums is only 60 percent of the average during the ten years before the ACA; and “Obamacare” is more popular. Even little old ladies know that.